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Lorenzo v. Prime Communications, L.P.

United States District Court, E.D. North Carolina, Western Division

January 31, 2018

ROSE LORENZO, on behalf of herself and all others similarly situated, Plaintiff,
v.
PRIME COMMUNICATIONS, L.P., a Texas General Partnership, Defendant.

          ORDER AND MEMORANDUM & RECOMMENDATION

          KIMBERLY A. SWANK, UNITED STATES MAGISTRATE JUDGE.

         This matter is before the court on Defendant's motion to decertify or amend the Rule 23 class previously certified in this action, the motion having been referred to the undersigned by Senior United States District Judge Malcolm J. Howard for memorandum and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). Plaintiff, representing the Rule 23 class members, has responded in opposition to Defendant's motion, and Defendant has replied. Defendant's motion is, therefore, ripe for ruling.

         BACKGROUND

         This is an action under the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. (FLSA) and the North Carolina Wage and Hour Act (NCWHA), N.C. Gen. Stat. §§ 95-25.1 et seq. against Defendant Prime Communications, L.P. (Prime). Prime operates approximately 300 retail locations in twelve states from which it sells wireless and cellular communications products, plans, and accessories. Plaintiff Rose Lorenzo, a former employee of Prime, initiated this action on February 17, 2012. Alleging that Prime misclassified its Store Managers as exempt under the FLSA, Plaintiff seeks to recover unpaid overtime wages, liquidated damages, and attorney's fees and costs under the FLSA. Plaintiff also asserts claims under the NCWHA, alleging that Prime (i) failed to pay commissions and bonuses owed Lorenzo and other employees, (ii) made improper deductions to employee wages, and (iii) failed to pay employees all wages when due in violation of North Carolina's payday statute, N.C. Gen. Stat. § 95-25.6.

         The court previously granted Plaintiff's motions to conditionally certify her FLSA claim as a collective action pursuant to 29 U.S.C. § 216(b) and to certify her NCWHA claims as a class action pursuant to Rule 23 of the Federal Rules of Civil Procedure. (See Order & Mem. & Recommendation entered Jan. 15, 2014 [DE #74] (conditionally certifying FLSA collective and recommending certification of Rule 23 class); Order entered March 24, 2014 [DE #94] (denying appeal of FLSA collective certification and adopting recommendation and certifying Rule 23 class of NCWHA claims).)

         Prior to class and collective certification, Prime moved to compel arbitration of Lorenzo's claims based upon an arbitration provision contained in its employment handbook. Finding insufficient evidence of an agreement to arbitrate, the court denied Prime's motion. Prime moved for reconsideration on January 30, 2014, based upon newly discovered evidence of signed “acknowledgements” by Lorenzo and certain opt-in plaintiffs. Prime contended that these acknowledgements constituted agreements to be bound by the arbitration provision contained in Prime's employment handbook. Because the acknowledgement form expressly stated that the employee handbook is not a contract and “creates no bindery [sic] promises or contractual obligations, ” the court determined that Prime had failed to show that Lorenzo or the other opt-in plaintiffs had agreed to arbitration. Accordingly, the court denied Prime's motion for reconsideration. (Mem. & Recommendation entered March 31, 2014 [DE #97] adopted by Order entered July 9, 2014 [DE #151].)

         Prime appealed this court's certification of a Rule 23 class, Lorenzo v. Prime Commc'ns, L.P., No. 14-1622 (4th Cir. filed June 24, 2014), as well as this court's ruling denying Prime's motion to compel arbitration, Lorenzo v. Prime Commc'ns, L.P., No. 14-1727 (4th Cir. filed July 21, 2014). The Fourth Circuit consolidated the appeals and, on November 24, 2015, issued a published decision affirming this court's denial of Prime's motion to compel arbitration and dismissing as untimely Prime's appeal of this court's class certification ruling. Lorenzo v. Prime Commc'ns, L.P., 806 F.3d 777 (4th Cir. 2015).

         DISCUSSION

         At issue in the motion presently before the court is the court's Rule 23 certification of the NCWHA claims raised. Following discovery, Prime moved to decertify or, alternatively, to amend the Rule 23 class, which was previously defined as follows:

All natural persons employed by Prime Communications, L.P., in retail stores and kiosks in the State of North Carolina from February 18, 2010 to present who were paid commissions or bonuses based on sales.

         (Order entered March 24, 2014 [DE #94] at 5.) Plaintiff opposes decertification but agrees the class definition should be amended.

         I. Rule 23 Certification Standard

         To be certified as a class action under Rule 23, an action must meet four threshold requirements: (1) the class must be so numerous that joinder of all members is impractical (numerosity requirement); (2) there must be questions of law or fact common to the class (commonality requirement); (3) the representative parties' claims must be typical of the claims of the class (typicality requirement); and (4) the representative parties must be able to fairly and adequately protect the interests of the class (adequacy-of-representation requirement). Fed.R.Civ.P. 23(a).

         The action must also satisfy one of the requirements set forth in Rule 23(b). See Fed. R. Civ. P. 23(b)(1), (2), (3). This court previously certified the plaintiff class on the ground that “questions of law or fact common to class members predominate over any questions affecting only individual members and . . . a class action is superior to other ...


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